Confidential
Settlement – $11,900,000Facts
The plaintiff, a major league baseball team, purchased an Employer's Purchased Individual Disability Insurance policy for one of its pitchers who was acquired during the 1998 season. The pitcher played through the end of the 1998 season. The policy ran from Aug. 10, 1998 through Feb. 15, 1999, or the start of the spring training, whichever was sooner. Upon returning for spring training on Feb. 28, 1999, the pitcher was examined by the team physician, who determined he had significant weakness of his rotator cuff. However, the pitcher nonetheless pitched during spring training. Near the start of the regular season, the pitcher complained that he had "tweaked" his throwing arm and when called upon to pitch on opening day, stated that he could no longer pitch. The policy provided $4 million of coverage per year for the 1999 and 2000 seasons if the pitcher became disabled as a result of an accidental bodily injury which occurred during the policy period, or a sickness or disease which was first reasonably capable of diagnosis by a physician during the policy period. The team submitted a claim in December 1999, contending that the pitcher had been disabled as a result of rotator cuff disease which was first reasonably capable of diagnosis by a physician during the off-season, at a time when the policy was in force. The insurance company delayed a decision on the claim for 16 months, finally issuing a denial in April 2001.
Damages
Contract damages of $4 million per season for the 1999 and 2000 sports seasons, plus interest, attorneys' fees and punitive damages for bad faith.
Other Information
The case was settled following a mediation before retired Judge J. Lawrence Irving.
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